Cutting choices: Obamacare’s network shrinkage

September 23. 2013 4:29PMIt turns out that New Hampshire is not alone in having health care choices constrained by Obamacare. The New York Times reported on Sunday that insurers in many states are shrinking their provider networks because of the Affordable Care Act.

“Federal officials often say that health insurance will cost consumers less than expected under President Obama’s health care law,” the Times reported. “But they rarely mention one big reason: many insurers are significantly limiting the choices of doctors and hospitals available to consumers.”

New Hampshire is experiencing this as Anthem Blue Cross/Blue Shield, the sole insurer to offer coverage in the heavily regulated “exchange” established by Obamacare, has cut 10 hospitals from its provider network. The Times reported that this is happening in Arizona, California, Colorado, Florida, Illinois, Indiana, Kentucky, Montana, New Mexico, Oklahoma, Tennessee and Texas as well.

Why? To reduce costs. Here is one way that happens: “Even though insurers will be forbidden to discriminate against people with pre-existing conditions, they could subtly discourage the enrollment of sicker patients by limiting the size of their provider networks,” as the Times put it.

Obamacare was based in part on the theory that the government could simply force insurers and providers to eat costs. Real life does not work that way.